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tv   Wall Street Week  FOX Business  February 4, 2017 12:30am-1:01am EST

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i hope your team wins, as long as it's my team. >> announcer: from fox business headquarters in new york city, the new "wall street week." gary: welcome to "wall street week." i'm gary kaminsky. liz: i'm elizabeth mcdonald. wall street cheered the news that president trump is rolling back dodd-frank regulations. >> the biggest thing that we have to fix is that we have to get the united states banking system working again. we need to make capital available for small and
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medium-size sphd businesses and entrepreneurs. today banks do not lend money to companies. banks are forced to horde money because they are forced to shored capital and they can't take any risks. gary: powerful stuff. lots to get into. who to ask, bob doll and dan shaffer. this is what the market want the last two weeks. the market goss did friday morning -- got it friday morning. > we need to continue to see regulatory rollback. financial stocks will continue to do well if we have economic growth, higher interest rates and rolling back regulation. gary cohn said we need a healthy
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baing system. liz: the banks are like in a mini ice age. it was stranding the rust belt 2,000 guys and investors. gary: that means they are hoarding the cash. they are buying treasuries. to me it's a joke. these are the two guys who aloud this to happen. then when the mole thing crashed, these guys came to rescue like the fired firemen lighting the fire then coming to put it out. that's how i veufd this act that locked up not just the banks. but people learning and understanding investments that could be to their advantage because they need to be sold products. people need to be compensated
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properly for that. gary: can you explain to the viewers, what does it mean if this rule that was supposed to go into effect in april. a lot of the industry lobbied against it. what does it mean to the average investor. >> 2eu9 frees up financial investors to do what they were doing and hopefully best for their clients. financial advisors need to do the right thing for the consumers. but it went past that. you have got to bite lowest key product. this will free financial advisors to be more relaxed and go back to doing what is right for the customer. gary: if the financial advisor wasn't doing the right by the investor, they would go finds another financial advisor.
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liz: they were like safety engineers. it stranded investors. the dodd-frank said you have got to be sure you give your clients the best advice. they are saying i'm not going to cracked down on by a regulator. >> this is too much protection going on for these consumers. it doesn't allow a consumer who wants to take risk in a product to put money into the system for investment. the fiduciary rule would prevents somebody from saying, you know what? i have got an idea, it's riskier. but it could give you have tremendous returns down the road. they are all afraid to do that because of the act because they will get sued. the e.o. coverage for airers piano missions went through the roof and they weren't allowed to sell certain products. gary: dan, when you joined us
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last year you did not like the financials, and for a while they were dead man man -- were dead money. but since the election they have had a great run. do you like the financials now? >> i was wrong on that call for the time period. i believe interest rates are going to go down dramatically. and i think it banks went up because of that. i think you will see rates in a run because of that it was a panic bailout. but the banks are going to go into the same crisis they went into before. liz: this an important bob. interest rate hikes are kryptonite to the market. so what -- just to take the other side of what dan is saying.
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what if we get into a trade war and chain a stops buying bonds. yields could spike. what if we get a tax cut. government has to borrow more. do you have see yields going up pants market going down? >> the overwhelming question would be, is the economy getting better? and i think the trump fiscal policy is designed to do that. we have to remember in november we are busy with the election. they were a little better. then december, november was okay, and the pattern goes. we are seeing a little better growth. i think wage rates will continue to move higher. all that in my view will push interest rates higher. liz: donald trump is one big black suwannee vents. >> assuming we'll get this regulation and more pricing for inflation. more nominal growth.
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we may see u.s. novel mall growth in 2018 at 5%. i think that means interest rates drift higher. >> so you would say use any of the strengths you see right now in terms of the regulatory relief to sell these stocks. do you agree with that, bob? >> we think there are three necessary conditions. and today is a good day. less regulation. but we need the higher interest rates and the better economic growth. >> i hear what you are saying. we have unemployment at a low rate. velocity of money that collapsed. and debt to gdp of 105%. it's higher than it was in the last 15 years. this will slow down growth. trump's tax policies will bring less revenue into the government and he's negotiating deals with which the government purchases from.
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who is the biggest purchaser in the economy? it's the government. if we pull back tax revenue and government spending that will slow count economy and interest rates will go lower. >> we'll get into whether dan is right about the economy in terms of earning. guys stay right there. "wall street week" will be right back. >> announcer: apple shines but amazon fails to amaze. "wall street week" has the my business was built with passion... but i keep it growing by making every dollar count. that's why i have the spark cash card from capital one. with it, i earn unlimited 2% cash back on all of my purchasing. and that unlimited 2% cash back from spark means thousands of dollars each year going back into my business...
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liz: the january jobs report dropping friday morning. the u.s. economy adding 227,000 jobs while the unemployment rate
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ended higher to 4%. gary: what should investors make of the earnings result? dan, what about earnings? we talked about your concern about the economy. how do you look at earnings and how does that factor into your overall market outlook. >> the gap that's generally accepted and the proforma. a lot of companies are taking money ancontinng to grow at a low scale. they are mostly buying their stock. some of them have guided lower. some of them said they expected expenses to increase the next couple of quarters. the earnings seem great. the stock prices themselves are fluffy because of expectations and i think they are way ahead of themselves. i'm looking for earnings to
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plateau or decline over the next couple years. that's what makes them all -- >> we have four straight quarters. but the thing we are talking about now is border tax. you have got hundred retailers targeting walmart. you have the koch brothers saying wait a second. are you going to go to your voter consumers saying you want to pay more for retail goods? >> who knows because we don't have the legislation yet. it's lobbying to get certain things and not other things. earnings are growing 8%. we have not had an 8% quarter in some time. 2% is buyback. but that leaves 6%. i think earning are doing well. tomorrow might be a different
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story. but as long as economic growth stays 2 plus i think we are okay. economy and earnings are moving the market. and the other is potential legislation. that's where we get to use the word "spiking." liz: it makes markets uncertain and chaotic. gary: there is a knock on strategists saying you guys are always bullish. i have known you for a long time and you are not always bullish. how do you characterize people who are thinking of investing now to stay on the sidelines. >> that's half the normal. i'm cautiously hopeful. 2 points for the dividend yield that gets me the 7th. i have to avoid the wrong stocks and find the right stocks.
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as long as earnings backdrop is oh sky, i can't see anything but temporary pullbacks. we had one last year. you could buy all the stocks you wanted at 18.50 on the s & p. liz: i don't think, dan, that trump gets his border tax. i think republicans and the koch brothers are freaked out. the question is, what do you buy and when do you buy? people are so nervous. when do you have get in. do you buy tech, given they are in a fight with trump? where is your pick? >> i think we are in the most uncertain times since the late 70s. that's how i see the 40-year cycle coming into play.
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it's almost like musical chairs. even if the government and the fed raising rates. you don't know what stocks to buy. you need to be diversified and nimble. you need to make sure you are working with somebody who those what they are doing based on what the market conditions are or you are a long-term investor and you buy the dips. liz: what do you buy? >> healthcare. the on sector that's count last 12 months. what's repeal and replace going to look like. meanwhile demographics are improving. i'm nibbling on healthcare and weakness. technology, the best sector on the market. when we get repatriation which i think we'll, there is no sector better. gary: it sounds like if you are right, i should be buying bonds.
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>> the report comes out every friday afternoon by the futures trading commission. the smart money is the highest in history on the 10-year. it's at 5 or 7 year highs on the 30 year. what do they know that we don't know? why are they so long on bonds and the public and hedge funds so short who are the speculate tore liz: i think the bond market is the action. >> you asked me what sectors will i be buying. food will become a scarce commodity over the next two to five come any. i would be looking at food companies. because the weather patterns and the farmers not being able to plant. this will become the next problem area where prices need to rise.
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liz: i think you are talking about government bonds. trump is talking about wiping out the deduction for a corporate bonds market. there is a lot trump has put on the table and his ideas are great on paper. it looks great in the textbook. but he has a head wind in front him. look at the people protesting against him and his policies. wait until he's this to the congress and everybody has to do everybody phase. gary: some food for thought and a sobering view it's always great to get good insight. liz: we have more "wall street week" back in 2 after this. don't go away. >> it's been a catastrophe for our country and workers. >> announcer: president trump is tackling trade. but what happens in tax reform.
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>> it's been a catastrophe for our workers and jobs are leaving our country. i wants to change the. maybe we do a new nafta. gary: trump talking trade and tweeting about tax reform friday morning and wall street seemed to be noticing. before that tweet had solely focused on trade with very little mention of taxes. liz: should investors be worried? let's bring in our fox business all-stars.
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charlie, you have been reporting on this all week. charlie: i think take the trade stuff out. regulatory overhaul is very good. the price of in the pudding. we'll see how we are going to do it. he's speakinin a lot of platitudes. but if he goes after dodd-frank. i think gary cohn is smart enough to know the stuff in dodd-frank that needs on taken out immediately. so that's a positive. taxes, we need more disclosure on exactly on what is his tax plan. does he do the business tax first? and the timetable of that. nafta is another story. one of the problems with trump is the friendsy of doing so much, you don't prioritize. one of the priorities the market
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was looking for is tax and regulatory reform right off the bat. >> you said you were talking to investors. and one of the reasons the stock market stalled out was this wasn't something -- so did they get what they wanted friday morning? >> i think if you look at the market, they got some of what they wanted. bank stocks responded positively. i just think it's one day and you have to see how this pans out. is there not a lot of daylight into what they are going to do. there is no daylight into what they are going to do with taxes yet. liz: paul ryan would say maybe by august. if they maybe cut corporate taxes. but then that border tax is still there. >> it's so complicated and intertwined. he has done so much.
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is he going to cut taxes first? maybe. do it all in one step through personal and corporate at the same time. not you question is how. where does the border tax come in. liz: the koch brothers are saying we aren't going to give you campaign donations if you do that border tax. charlie: one of the problems we are having with trump, you do have legislative priorities during the transition. one of the problems is it's a sort of different many a jumble. it's almost contradictory in a lot of ways. you are building infrastructure in a totally keynesian way. and you are doing tax cuts. usual live you don't do both. you do tax cuts to spur the economy.
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we have seen a lot of supply siders tell you the infrastructure stuff doesn't work that well. but he ran on all this different stuff. and it's hard to implement a lot of conflicting policies. >> gary cohn said that when they re-patriate some of that money it will pay for some of the infrastructure money. and he says tax cuts take natural time. we can see 3% economic growth. charlie: part of the conflicting policies is gary cohn. he's a liberal obama supporters. for him to be talking about tax cuts is absurd. 24579s one of the problems -- that's one of the problems. gary: we are heading to the super bowl. who do you like. >> the packs.
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liz: we are going to see you next week. have a good weekend. achoo! (snap) achoo!
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. >> start taxing, goods coming from china. john: every day, politicians propose more rules. >> i'm very supportive of the mayor's proposal to tax sodas. john: unions love groups, they say they want, but are the protesters the real deal? >> i do not work for a fast-food restaurant. >> which fast-food restaurant do you work for? >> i don't work for fast food. john: bad rules give us warning labels. >> this may contain fish, warning. john: some bad rules rip

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